walmart's sustainability journey: defining sustainable
TRANSCRIPT
University of Arkansas, Fayetteville University of Arkansas, Fayetteville
ScholarWorks@UARK ScholarWorks@UARK
Wal-Mart Sustainability Case Project Supply Chain Management
12-10-2012
Walmart's Sustainability Journey: Defining Sustainable Products Walmart's Sustainability Journey: Defining Sustainable Products
(B) (B)
David G. Hyatt University of Arkansas, Fayetteville
Andrew Spicer University of South Carolina
Follow this and additional works at: https://scholarworks.uark.edu/scmtwscp
Part of the Business Administration, Management, and Operations Commons, and the Sustainability
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Citation Citation Hyatt, D. G., & Spicer, A. (2012). Walmart's Sustainability Journey: Defining Sustainable Products (B). Wal-Mart Sustainability Case Project. Retrieved from https://scholarworks.uark.edu/scmtwscp/7
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The Walmart Sustainability Case Project
Date: 12/04/2012
© 2012 Board of Trustees of the University of Arkansas and the University of South Carolina. This case study,
designed as a supplement to Walmart’s Sustainability Journey: Defining Sustainable Products (A), was prepared by
David Hyatt of the University of Arkansas and Andrew Spicer of the University of South Carolina. The case was
developed solely as a basis for class discussion and is not designed to serve as a source of primary data or be
construed as a commentary on management techniques. The authors thank Jon Johnson and Jeff Rice for their
assistance and insights in the creation of this case. For more information about the Walmart Sustainability Case
Project, a joint venture of the University of South Carolina and the University of Arkansas, please visit the project
website, http://sustainabilitycases.kenexcloud.org/about.
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
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Walmart’s Sustainability Journey: Defining Sustainable Products (B)
During the July 2009 Sustainability Milestone Meeting, Walmart CEO Mike Duke announced
that Walmart would be taking the lead in developing a multistakeholder consortium, which in
turn would design and implement a public standard for product sustainability. He justified the
announcement by noting,
Despite all the work that’s been done, we see only bits of information, but not the
full picture across the supply chain. We don’t know the patterns, hidden costs, and
impacts of the products we make and sell. Nor do we have a single source of data
or a common standard for evaluating the sustainability of products. If we want to
help the customer of the future live better, we need that data. We need that big
picture view. So today, we’re announcing that we will lead the creation of a
Sustainability Index. The Index will bring about a more transparent supply chain,
drive product innovation and, ultimately, provide consumers the information they
need to assess the sustainability of products.i
To develop the index, Walmart would help organize a “consortium of universities that will
collaborate with suppliers, retailers, nongovernmental organizations, and government to develop
a global database of information on the lifecycle of products … from raw materials to disposal.”
Then Duke announced that he would provide a lead gift of $2 million to establish The
Sustainability Consortium, a contribution that would rise to $6 million by 2012.
Despite Walmart’s leading role in the consortium, Duke was clear that the ultimate goal was to
develop a collective standard that could be used by multiple firms in reference to multiple
products:
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It is not our goal to create or own this index; we want to spur the development of
a common database that will allow the consortium to collect and analyze the
knowledge of the global supply chain. We think this shared database will generate
opportunities to be more innovative and to improve the sustainability of products
and processes.ii
Once the lifecycle-based database had been created, Duke hoped it would serve as the basis by
which suppliers communicated the sustainability of their products, in a standardized, comparable
manner. In turn, buyers at Walmart could better evaluate the sustainability of the products they
procured. Such capabilities would support progress on the third sustainability commitment the
company had made in 2005, namely, to sell sustainable products. He also anticipated that a
related simple tool could help consumers understand the environmental impacts of items they
were purchasing.
But it turned out that developing an index that communicated to consumers, already confused by
the plethora of sustainability labels, would be far more complicated than Duke anticipated.iii
The Sustainability Consortium
Almost three years after Duke’s announcement, The Sustainability Consortium (TSC) had grown
to include more than 90 members from business (representing at least $1.5 trillion in revenue),
government, and nongovernmental organizations (NGOs). The Consortium’s stated mission was
“to design and implement credible, transparent, and scalable science-based measurement and
reporting systems accessible for all producers, retailers, and users of consumer products.”iv
(See
Exhibit 1 for a listing of some TSC members as shown on the TSC Web.) Until the board of
directors was named in January 2011, the Consortium had been guided by its academic
codirectors, Jon Johnson of the University of Arkansas and Kevin Dooley of Arizona State
University (Dooley followed Jay Golden of Arizona State University, who took a position at
Duke University in August 2010). Johnson served as the chair of the board, which also included
five corporate seats, four university seats, and two NGO seats. The five corporate members were
elected from TSC’s general membership and included Andrea Thomas, Senior Vice President for
Sustainability at Walmart. Thomas was the third person to lead Walmart’s sustainability efforts,
after replacing her predecessor Matt Kistler in September 2010.
For businesses, TSC membership structure featured two tiers at its inception. Tier 1 membership
cost $100,000 and Tier 2 cost $50,000, though smaller firms received reduced rates. With Tier 1
Defining Sustainable Products (B)
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membership, firms attained select benefits, including participation in governance and access to
Consortium-wide working groups (see Exhibit 2). Although Walmart remained the largest
contributor, and many firms joined mainly in response to Walmart’s participation, TSC’s formal
governance did not provide Walmart with any special role. Instead, Walmart was just one of the
many companies responsible for figuring out how to collaborate and develop a system that could
provide a rating score for any product’s environmental impact.
To implement its strategy, the Consortium organized sector-specific and consortium-wide
working groups. The latter (i.e., Consumer Science, IT Standards & Tools, and Measurement
Science) aimed to address common issues, such as how to measure and what tools to use. The
sector-specific groups (Retail; Paper; Home and Personal Care; Electronics; Packaging; Food,
Beverage, and Agriculture; Clothing, Footwear, and Textiles; and Toys) instead examined
sustainability issues at different levels of aggregation, such as major product categories, and thus
worked to determine what should be measured. Overall, TSC aimed to develop sustainability
metrics at the product category level, defined as groups of products that share similar attributes
and functions, such as the cereal category, laundry detergent category, toy category, novel
category, and so on. A large Walmart Supercenter might carry as many as 150,000 products in
approximately 400 categories.v
Seeking Common Standards
An early challenge for TSC was managing public and private interests related to the development
of common environmental standards. Jon Johnson, the codirector, believed that member firms
shared a common interest in working together to address “pre-competitive” issues that would
enable the market for sustainable products to work more effectively:
In a pre-competitive space, companies can create conditions under which they can
later compete more effectively and efficiently. Information is the raw material of
markets, and truly efficient markets require perfect information, but the
information they have is imperfect. If firms can collaborate in a pre-competitive
way to create better information with fewer information asymmetries, more
credibility, more certainty, and most importantly, more harmonization so that
everyone is speaking the same language, then they can later interact more
effectively in a competitive market, because they’re exchanging better
information, and doing so more efficiently. Developing standards is a perfect
example because companies should protect proprietary information but release the
kinds of information that are necessary for decisions to be made across
organizational boundaries.vi
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Thus, the Consortium strived to accelerate the market for sustainable products by providing
member companies with information that they could use to better understand, share,
differentiate, and declare the environmental impact of their products.
Despite the common goal of addressing “pre-competitive” issues in market development, many
firms considered the creation of any reporting label or scorecard as a competitive issue that
should, at least at first, be left to individual members, rather than decided on as a whole. The
development of an algorithm to evaluate the trade-offs among multiple dimensions of product
sustainability (e.g., carbon, water, energy, waste) raised competitive concerns. What dimensions
would be included? How should they be measured, weighted, and reported? Who gets to arbitrate
if firms disagree about what the standards should be? For some firms, the failure to create any
standards offered a better outcome than developing a standard that might harm their product
sales or marketing.
To balance public and private interests and address such questions, Johnson recognized that TSC
could not own or operate a proprietary sustainability index:
There is a fundamental difference between a system containing data sufficient to
create a label and the label itself. That is to say, different stakeholders could
create different labels from the same data system. Those differences would result
from the different political, competitive, moral, social, and cultural beliefs
emphasized by those groups. For instance, social dimensions such as working
conditions might be important for one group but not another. Those kinds of
judgments are just not within the purview or even expertise of the Consortium.
Our work should be focused on building a science-based platform that these
parties can use in their assessments of product sustainability, no matter what lens
they choose.
The Consortium therefore aimed to separate itself from Walmart’s, or any other individual
company’s, preferences and develop a comprehensive index that could directly evaluate a
company’s product sustainability claims. As Johnson remarked at the time, “The Walmart
Supplier Sustainability Assessment Tool is really not directly relevant or related to what we're
doing. What we're doing is creating a system that would enable companies to get information on
product categories or products. It’s not at the company level.”vii
Thus, TSC members would
develop a scientific platform, and consumer products companies would use it to assess the
environmental impacts over any particular product lifecycle. Helping companies lower their
Defining Sustainable Products (B)
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environmental impact did not mean that the Consortium would participate in any product design
or comparative product ranking among competitors.
Sustainability Measurement and Reporting Systems
To achieve these goals, TSC first developed a framework, the Sustainability Measurement and
Reporting Systems (SMRS), to define for any particular product category what product
manufacturers should measure, how to measure it, and how to report it to a common database.
As initially conceived, this process would create a market-typical baseline model that described
the environmental impacts (e.g., CO2 emissions, water and energy use, waste) throughout the
product life cycle for a particular product category (e.g., orange juice).viii
The baseline model
would offer a starting point for comparing different products within the category (e.g., frozen
orange juice); identifying the common high impact processes (“hot spots”) in production,
distribution, and use phases; and, if data were available, quantifying the hot spot impacts. The
next step would include validated product characteristics and processes that had been shown to
improve performance. These validated tactics then would aid suppliers, retailers, and others in
locating the highest impacts in product life cycles; if the data were available, they also could
differentiate products from the baseline model. According to Johnson:
Taking into account the baseline carbon emissions associated with market-typical
orange juice, a supplier could identify one or more performance drivers that
reduce carbon, such as a different nutrient management plan known to reduce
carbon emission in the orange grove. The supplier might also be able to act on
other performance drivers in different high impact stages of the life cycle which
would reduce carbon emissions. Then the company (or its customer) can compare
their orange juice with the market-typical orange juice on the dimension of carbon
emissions and see if there are real improvement opportunities. This process could
be repeated for water, waste, or other environmental dimensions.
To discern the feasibility of these baseline models, through the winter of 2011 the Consortium
focused on seven prototype product category baseline models in depth (orange juice, laundry
detergent, laptops, wheat cereal, strawberry yogurt, televisions, and personal cleaners). The
outcomes of this process would be leveraged into either an expansion of the baseline models or
the pursuit of an alternative model. Johnson reflected on the issues:
We expected in the beginning that a full, LCA [life cycle assessment]–based
methodology for all products and all dimensions was going to be quite difficult to
achieve in the near term, but we didn’t know how far we could get with it. Many
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experts told us any kind of LCA-based approach would be impossible, while
others were saying that it was ready to go out of the box. Rather than engage in an
endless discussion among the academics, NGOs, and corporates, we decided to
just try to build an LCA-based system and see for ourselves what was possible,
what was impossible in the near term, what was impossible in principle, and how
we could adapt the systems to generate something usable in the short term and
aspirational in the long term.
Progress on the prototypes turned out to be painstakingly slow, particularly because the data that
was needed to develop a baseline for a product’s full life cycle was difficult to collect, and
because not all of TSC members were completely aligned with the strategy. As of the winter of
2011, some members, as well as representatives of the press and the environmental community,
noted genuine concerns about the Consortium’s pace in developing new product standards.
The Consortium faced issues of credibility, beyond these speed to market concerns. Other
organizations were interested in providing similar services and were developing competing
frameworks. The Sustainable Apparel Coalition, formed at about the same time as TSC,
represented a multistakeholder effort to reduce the environmental and social impacts of footwear
and apparel. Underwriter’s Laboratories had made significant investments in helping companies
assess the sustainability of their products, and these efforts had considerable overlap with TSC
work. The Consortium also wished to be recognized by the consumer goods industry as the
primary industry source for standards development. To achieve this credibility, support from the
Consumer Goods Forum was critical, because the global industry group, with more than 400
members (dominated by retailers, manufacturers, and service providers), had substantial
influence in the consumer goods industry. But the Consumer Goods Forum already was
discussing frameworks similar to the new ideas emerging from TSC.
Then in the spring of 2011, the Consortium undertook an evaluation of its progress on the
prototypes, in which it considered both stakeholder feedback and the framework developed by
the Consumer Goods Forum. In response, TSC modified its original sustainability reporting
framework, in an effort to move more quickly across a broader range of products. In particular,
TSC ended its initial experimental effort to address the full life cycle analysis (LCA) impacts of
a few products and decided instead to move more quickly to develop a simplified reporting
format for environmental impacts.
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To implement this new strategy, it initiated the SMRS using designated “Level 1” and “Level 2”
stages. The Level 1 stage would produce a common platform for companies to share category-
based environmental performance data and outcomes, on the basis of their hot spot analyses,
improvement opportunities, and stakeholder concerns. A hot spot was defined as “a unit process
or phase of a product life cycle that has a potentially significant environmental or social
impact.”ix
The improvement opportunities entailed known best practices that could be employed
by producers and manufacturers to address hot spots. Stakeholder concerns referred to those
issues associated with the product category that important stakeholder groups (e.g.,
environmental NGOs) had raised but for which insufficient scientific evidence existed to make a
definitive claim. They were included in the Level 1 SMRS because such issues frequently garner
considerable public attention—sometimes even more so than important issues with a stronger
scientific basis—and thus business decision makers must recognize and understand them.
To identify hot spots and improvement opportunities, TSC and its members could undertake an
intensive scientific analysis of a product’s impact across its life cycle, or they might review
published literature and experts’ opinions, especially if relevant data are lacking or product
systems are particularly complex (e.g., biodiversity losses due to fisheries depletion). To achieve
greater speed and scope, the Consortium chose to rely initially on published reports, expert
opinion, and industry agreement to identify environmental challenges and opportunities, rather
than engage in the original LCA and reporting, which would have taken more time and required
greater resources and capabilities. Finally, the outcomes of the Level 1 sustainability reporting
were designed to guide business-to-business (B2B) conversations, serve as the foundation for
supply chain initiatives, and evaluate producers at the product category level.
In Level 2 sustainability reporting, to follow after the Level 1 goals were accomplished, TSC
hoped to enable more specific, validated product declarations and B2B communication. It would
deploy formal international standards, based on the ISO 14000 series, and provide category-level
data to enable firms to differentiate their products from a baseline, in support of their formal
product declarations.x The Consortium also would provide companies with information that they
could use to understand and share information in the first stage (Level 1), then differentiate and
declare their products in the second (Level II). (Exhibit 3 offers a visual representation of the
different stages and the Level 1 hot spot model outcomes.)
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The Level 1 reporting system would rely on a structured, wiki-style knowledge base comprising
several interrelated components for each product category:
Category Dossiers. These collections of evidence would pertain to the category’s supply
chain, environmental and social hotspots, improvement opportunities, and stakeholder
concerns. They would include extensive compilations of literature reviews, summaries of
expert panel interviews, and other evidence-based information related to the
sustainability impacts of a product category. Dossiers were open to continuous
commenting and revision and intended for a technical audience.
Category Sustainability Profiles. Syntheses of product sustainability knowledge and
improvement opportunities, the CSPs would offer two-page summaries of the
information in the dossiers, with essential information about the product category’s hot
spots, improvement opportunities, and stakeholder concerns. The CSPs would be
published periodically—once or twice a year—and were developed for use by
nontechnical business decision makers.
Key Performance Indicators. Featuring key metrics and questions about product category
sustainability, the KPIs were associated with the corresponding CSPs and similarly
grounded in the information contained in the dossiers. They were published on the same
schedule as the CSPs. Retailers and other actors could use these KPIs to evaluate the
sustainability performance of their suppliers at the product category level.
Together, dossiers, CSPs, and KPIs represented an information generation and reporting system
that member companies could use to standardize their communications about sustainability. A
TSC Industry Reporting Platform was planned to be piloted in late 2012; with it, companies
could provide information on key dimensions, as required by buyers throughout the consumer
goods industry. The hope was that this innovation would obviate the need for organization-
specific scorecards and reporting platforms.
Walmart’s Implementation of the Index
Walmart piloted the consortium hot spot analysis in 10 product categories (e.g., cereal, coffee,
apparel, hardware, electronics, toys) and thus created category-based “Live Better Scorecards.”
(See Exhibit 4.) The scorecards allowed buyers to evaluate and compare supplier performance on
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the most prominent issues and opportunities in a product category. By August 2012, Walmart
had implemented scorecards in more than 100 categories, reaching roughly 135 buyers in its U.S.
and Canadian Sam’s Club and Walmart businesses. Improvements in TSC’s category
identification and Level 1 SMRS methodologies then expanded the list of categories covered;
Walmart anticipates that scorecards will be available for 60% of its U.S. sales volume by the end
of 2013. According to Jeff Rice, Director of Sustainability, the significance of the
implementation has been immense:
To make sustainability a part of Walmart’s core business, we had to build
sustainability into the way we buy and sell merchandise. As we roll out the Index
in these initial 107 categories, and as we expand implementation of the Index
across our buying organization in 2013, we are building sustainability into the
decision making for one of the largest procurement organizations in the world.
The suppliers who work on this with us will be the suppliers that grow with us
and will become stronger, more profitable businesses that significantly reduce the
impact the consumer goods economy has on our resources and environment.
A new Sustainability Value Network (SVN) also helps buyers implement the scorecards. When
buyers adopt the scorecards, sustainability dimensions get added to their annual performance
evaluation criteria. The process will be part of Walmart’s Joint Business Planning process in
2013, including incentives and recognition for leading suppliers.xi
Rice thus noted the potential
impact on suppliers:
We’ll see some shifts in terms of sustainability. The radical shift is in how we talk
to suppliers about it. We’re at a really interesting point in history, where
sustainability is going to impact being a supplier to Walmart.… Our goal is to
improve the sustainability our suppliers and the products our customers love, so
we will recognize leading suppliers both internally and externally, and we’ll
identify who needs to improve and work with them to get better.xii
However, communicating sustainability information to consumers remained a long-term goal
that would not be implemented anytime soon.xiii
Efforts were ongoing in other areas, such as
nutrition, where a “Great for You” label that relied on the well-developed field of nutritional
science was applied on some private-label food products.
Other Sustainable Product Initiatives
In the three years since Mike Duke’s announcement of the index, other company initiatives also
aimed to create more sustainable products; the most significant were announced at the October
Defining Sustainable Products (B)
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10, 2010, Sustainability Milestone Meeting. They focused on sustainable agriculture, attempting
to increase locally sourced food, reduce food waste, provide related training to 1 million farmers,
increase opportunities for women, eliminate Brazilian-sourced beef that was contributing to
Amazon deforestation, and require all private-label products to incorporate sustainably sourced
palm oil by 2015. (See Exhibit 5 for excerpts from this press release.)
Stakeholder Reactions
Initially, there was notable skepticism in the business and NGO communities. In 2009, the NGO
community generally took a “wait and see” approach, and only the most proactive and pro-
business NGOs engaged in TSC. Others expressed more serious doubts about the credibility of
the enterprise: GreenBiz CEO Joel Makover was “concerned about the optics of it all: the
perception that major manufacturers are helping to create the methodologies or otherwise set the
rules of rating products, presumably to their advantage.”xiv
He also worried about the
“amorphous” nature of the goals set by TSC, which did not seem to offer a value proposition for
involvement by other companies—especially if they had to pay the stiff membership dues.
Nonetheless, major companies including the retail giants Kroger, Tesco, Royal Ahold, Best Buy,
and Marks & Spencer had signed on to the Consortium. A 2011 Fortune article reported on both
the slow progress and the extreme complexity of the task at hand, such that even some
environmental groups were suggesting alternative, simpler approaches: “digging deeply into
supply chains is so difficult, in fact, that even some environmental groups don’t have much hope
that a sustainability index will push firms to invest in the staffing and expense it requires.”xv
A
March 2012 report by the nonprofit Institute for Local Self-Reliance also accused Walmart of
greenwashing in its efforts to institute the index.xvi
Next Steps for Walmart and the Sustainability Consortium
At the April 18, 2012, Sustainability Milestone Meeting at Walmart’s corporate offices in
Bentonville, Arkansas, Board Chair Rob Walton addressed the meeting participants via video
chat, to remind them of the importance of sustainability to Walmart’s future. He rhetorically
asked the group how his father, Sam Walton, would have felt about Walmart’s sustainability
journey. He provided his own answer: “No one would have been prouder, and no one would
have asked harder questions.” Laying out the business case, he challenged: “I want to ask you to
redouble your efforts. Put sustainability even deeper into every part of the business so that every
Defining Sustainable Products (B)
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associate drives progress. Scale up and speed up on projects on waste, energy, agriculture, and
the sustainability index.”xvii
His summary emphasis on the index was not accidental. Much of the
remainder of the meeting focused on selling more sustainable products and doing it more
quickly. CEO Mike Duke repeatedly reminded the group that he expected an acceleration of both
effort and outcomes. Then Bill Simon, President and CEO of Walmart U.S., noted in relation to
the index, “we’ve really got to figure that out; it’s been more difficult to get in place than what
we would have imagined when we started.”
Indeed. Only days before, at the Fortune Brainstorm Green conference, Rob Walton was on a
panel with the magazine’s managing editor, in which he explained, “The sustainability index,
one of the questions was about it not going fast enough. But good gosh, this is really complicated
stuff. And, it’s giving our buyers information to inform decisions and compare products. It will
be a great day when we can give consumers that information….”xviii
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Exhibit 1: Sample Consortium Membership, From TSC Web, July 2012 xix
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Exhibit 2: Consortium Membership Application, July 2012
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Exhibit 3: Consortium Implementation Strategy and Level 1 Outputs
Source: Coutesy of the Sustainability Consortium, July 2012.
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Exhibit 4: Live Better Scorecard
Source: Courtesy of Walmart, presented at the April 18, 2012 Sustainability Milestone Meeting.
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Exhibit 5: Excerpts from Sustainable Agriculture Press Releasexx
BENTONVILLE, Ark., Oct. 14, 2010—Walmart today launched its new global commitment to sustainable agriculture that will
help small and medium sized farmers expand their businesses, get more income for their products, and reduce the environmental
impact of farming, while strengthening local economies and providing customers around the world with long-term access to
affordable, high-quality, fresh food.
“More than 1 billion people around the world rely on farming and hundreds of millions of them live on less than $2 a day,” said
Mike Duke, Walmart president and CEO. “Globally, with a booming population, food production must increase roughly 70 percent to feed 9 billion people in 2050.”
Duke continued, “Through sustainable agriculture, Walmart is uniquely positioned to make a positive difference in food
production—for farmers, communities and customers. Our efforts will help increase farmer incomes, lead to more efficient use of pesticides, fertilizer and water, and provide fresher produce for our customers.”
Walmart’s sustainable agriculture strategy is divided into three broad areas, each containing specific supporting goals to help the company track and report its progress.
Support farmers and their communities
More than a billion people rely on agriculture for subsistence. By the end of 2015 in emerging markets, Walmart will help many
small and mid-sized farmers gain access to markets by:
selling $1 billion in food sourced from 1 million small and medium farmers;
providing training to 1 million farmers and farm workers in such areas as crop selection and sustainable farming
practices -- the company expects half of those trained to be women; and
increasing the income of the small and medium farmers it sources from by 10 to 15 percent.
In the U.S., Walmart will double its sale of locally sourced produce and increase its purchase of select U.S. crops.
Produce more food with fewer resources and less waste
Walmart has one of the world’s largest food supply chains and is committed to reducing and optimizing the resources required to
produce that food and driving more transparency into its supply chain. For the first time Walmart will ask suppliers about the
water, energy, fertilizer and pesticide they use per unit of food produced. The goals include:
accelerating the agricultural focus of the Sustainability Index, beginning with a Sustainable Produce Assessment for
top producers in its Global Food Sourcing network in 2011;
investing more than $1 billion in its global fresh supply chain in the next five years; and,
reducing food waste in its emerging market stores and clubs by 15 percent and by 10 percent in stores and clubs in its other markets by the end of 2015.
Sustainably source key agriculture products
Farming practices are having unintended side effects, from deforestation of the world’s rainforests to increasing greenhouse gas emissions. Walmart will focus on two of the major contributors to global deforestation, palm oil and beef production.
Require sustainably sourced palm oil for all Walmart private brand products globally by the end of 2015. Sourcing
sustainable palm oil for our U.K. and U.S. private brand products alone will reduce greenhouse gas emissions by 5
million metric tons by the end of 2015.
Expand the already existing practice of Walmart Brazil of only sourcing beef that does not contribute to the
deforestation of the Amazon rainforest to all of our companies worldwide by the end of 2015. It is estimated that 60
percent of deforestation in the Brazilian Amazon is related to cattle ranching expansion.
Defining Sustainable Products (B)
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Endnotes
i Duke, M., Remarks prepared for delivery. Sustainability Milestone Meeting, July 16, 2009. Available at http://walmartstores.com/download/3880.pdf: Bentonville.
ii Ibid.
iii The original conception of the index had three parts: (1) a 15-question, corporate-level, Walmart Supplier Sustainability
Assessment Tool that would enable Walmart to gauge suppliers’ progress in four areas: energy and climate, material
efficiency, natural resources, and people and community; (2) a multistakeholder collaboration to develop science-based
standards; and (3) a customer-facing tool that would communicate an overall sustainability score for products that Walmart sold.
iv The Sustainability Consortium, http://www.sustainabilityconsortium.org/who-we-are/
v Mobley, Claudia. Personal communication with Director of the Center for Retailing Excellence at the University of Arkansas, July 13, 2012.
vi Johnson, Jon. Personal interviews, conducted expressly for the development of this case, July 7, 2011, and November 14, 2011.
vii The Myths and the Mission Behind the Sustainability Consortium, GreenBiz, December 4, 2009. Available at
http://www.greenbiz.com/news/2009/12/04/sustainability-consortium-myths-mission.
viii An SMRS also can incorporate other data, such as best practices in a product category (especially in the absence of life cycle
data) and social hot spots—that is, production activities in supply chains that represent issues of concern, such as human rights or community well-being.
ix The Sustainability Consortium, http://www.sustainabilityconsortium.org/glossary/.
x The LCA methodology had been substantively developed since the 1990s, in response to growing corporate interest. Various
LCA-related environmental standards (ISO 14000) and technical reports published by the International Standards
Organization (ISO) promulgate worldwide commercial and industrial standards, designed to provide guidance and
streamline LCA methodologies. The LCA always includes a life cycle inventory, “an objective, data-based process of
quantifying energy and raw materials requirements, air emissions, waterborne effluents, solid waste, and other
environmental releases incurred throughout the life cycle of a product, process, or activity.” (ISO) Therefore,
organizations can develop baselines for comparisons.
xi Joint Business Planning involves a close collaboration with major suppliers, resulting in the creation of long-term business
plans. Through this process, Walmart and suppliers to align their strategies to improve sales, plan key item launches, improve consumer insights, and build category captains.
xii Jeff Rice, as quoted in Nagappan, P., How Walmart Is Using its Sustainability Metrics to Drive Productivity, GreenBiz, June 6,
2012, Available at http://www.greenbiz.com/blog/2012/06/06/how-walmart-using-its-sustainability-metrics-drive-
productivity. The quote wording was modified by Jeff Rice on August 26, 2012.
xiii King, B., “Walmart Explains Introduction of Sustainability Scorecards for Product Categories,” Sustainable Brands, May 2,
2012. Available at http://www.sustainablebrands.com/news_and_views/articles/walmart-explains-introduction-sustainability-scorecards-product-categories.
xiv Makower, J. Inside Walmart's Sustainability Consortium, GreenBiz, August 17, 2009. Available at http://www.greenbiz.com/blog/2009/08/17/inside-walmarts-sustainability-consortium.
xv Keegan, P., “The Trouble with Green Product Ratings,” Fortune, July 25, 2011. Available at http://money.cnn.com/2011/07/12/technology/problem_green_ratings.fortune/index.htm.
xvi Mitchell, S., “Walmart's Greenwash: How the Company’s Much-Publicized Sustainability Campaign Falls Short, While its
Relentless Growth Devastates the Environment,” Institute for Local Self-Reliance, 2012. Available at
http://www.ilsr.org/new-report-walmarts-greenwash/.
xvii Walmart Sustainability Milestone Meeting, April 18, 2012. Video available at http://www.walmartstores.com/sustainabilitymilestone/2012/april/default.aspx
xviii Comments by Rob Walton, 2012 Fortune Brainstorm Green conference. Available at http://money.cnn.com/video/news/2012/04/17/n-f-bsg-walmart-walton.fortune/.
xix The Sustainability Consortium, http://www.sustainabilityconsortium.org/members/.
xx Walmart, 2010. http://news.walmart.com/news-archive/2010/10/14/walmart-unveils-global-sustainable-agriculture-goals